The company said it generated cash from operations of $US328 million ($A421 million), a $599 million improvement from the first quarter.
However, Alcoa still posted a loss from continuing operations of $312 million or 32c per share, or $256 million or 26c per share excluding restructuring charges.
The loss is a $168 million improvement on the March quarter loss of $480 million.
The net loss was $454 million, down from $497 million in the previous quarter.
Lower aluminium prices saw year-on-year revenues decrease by $3 billion to $4.2 billion, while the figure was a 2% improvement on the March quarter.
In the first six months of this year the company realised procurement savings of around $1 billion, and Alcoa president and chief executive officer Klaus Kleinfeld said the initiatives were working.
"Our operational and financial initiatives also provide Alcoa with the focus and flexibility to compete and grow in the most profitable segments of the industry as the economy recovers," he said.
"Now Alcoa has the staying power and reduced cost base to withstand the most serious downturn in the history of the aluminium industry."
Capital expenditure was $418 million and Alcoa remains on target to reduce 2009 spending by 50%.
Despite the reduction, the company is currently commissioning the Juruti bauxite mine and the Alumar alumina refinery expansion, both in Brazil.
The first shipment of bauxite from Juruti is expected to occur within 90 days, while production from Alumar has begun and will ramp up during the second half of this year.
Free cash flow was negative $90 million, a $652 million improvement on the previous quarter.
At June 30, 2009, the company had $851 million in cash.
Alcoa is traditionally the first company to report its quarterly earnings to the US market and analysts were expecting the worst.
However, the loss was smaller than expected, boosting Alcoa's shares by 7% in after-hours trading on the New York Stock Exchange.
The results also boosted Alcoa's Australian joint venture partner, Alumina, with its shares rising A4c to $1.40 in early morning trade.
